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Federal Reserve Bank of St. Louis

-2It is perfectly safe to have tea if the water is boiled on the table where you
can make sure that it really boils.

With that exception, the only

security against polluted water is to drink the well known brands of table
water.

In Japan, Tan San is the beat and can bs had everywhere.
(4)

Fish is the most dangerous food unless it is thoroughly cooked.

It is a good carrier of cholera, but cholera, I believe, is practically unknown
in the East except in the summer months.

Nevertheless, it is well not to

eat fish unless it is surely well cooked.

The same precaution should be

observed about uncooked vegetables such as one might have in salads.

I

would advise eating no lettuce, celery, radishes, etc., in the hotels, even
the good hotels run by Europeans.
but occasionally they are.

These things are not very often served

On the other hand, the precautions which are

observed in private houses, and especially those of Uovernment oMcials, are
such that there is no need for any precaution in regard to food.

I have already explained the need for care about the bathing and
toilet arrangements in native Lo eels in japan.

Among the letters accompanying this memorandum, is one addressed to

K. Nishi, c/o Miyako Ebtel, Kioto, gaben, who is an exceptionally fine courier
for Japan.

If the trip justifies engaging a separate courier, I can un-

hesitatingly recommend him, and if he is engaged he will be pretty certain
to get an excellent nan.

It is possible, however, to get women couriers in

Japan, although I think they are less dependable than the non.
well to notify Nishi wall in advance.
Time may not permit a visit to the monastaries at Koya. San.
cemetery there is one of the most impressive things in Jsi,en.

Tho

The trip is not

one of much hardship and cnn be made up a mountain of about 6,000 feat by
rickshao.

Should it be possible to make that trip it should be borne in Lind


http://fraser.stlouisfed.org/
that Bank of St. stay in the Buddhist ,s.onastoixy, although one cnn sleep vox',
Federal Reserveone mustLouis

comfortably there as they will provide travellers with an ample supply of
411

bedding to rut on the floor.

Strange to say, they will admit ladies as

pilgrims, although it is a very remote place visited by comparatively few
travellers, and a little preparation is required for the trip.

The rules of

the monastarit forbid them to cook or eat anything but vegetables, and the

Japanese diet is sometimes a little difficult for the American palate.

If

the trip is made, I suggest taking a supply of eggs, coffee, evaoorated cream,
butter and bread, and possibly some preserves or canned fruit, on which one
can do very well for a ciF,1 or two.

Nishi can do the cocking and will know

exactly what to tale.

A visit to Koya San implies that one will make an honorable contribution
to the monastary where the traveller stops.

This means poeFibly iOOyen apiece.

The temple then puts a little tablet in the room where the morning service
is conducted and the traveller can thereaft-er rely upon intercession for the

security and happiness of his ancestors for a few thousand years hereafter.
By all means stop at Shojo-Shin-In which is the best monastary.

As a precaution

I em sending a note of introduction to one of the priests there who is a hood
friend of mine, and with when I correspond.

Ea will show ::'re. Barney every

possible attention.

One word of caution about letters of introduction to official people.

Many travellers carry letters of introduction to the, and it is a great
convenience to them to receive information well in advance o

he date of

arrival which might be accompanied in advance by tho letter of introduction
and advice of the name of the hotel where the traveller expects to stop.







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FEDERAL RESERVE BANK
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Hotel Ritz, London,
September 8, 1919.

Dear Tom:

I am writing to advise you of my safe arrival in London, and also
to thank you and Mrs. Felder for your many courte:lies to me while I
wa© in Paris.

It was a great pleasure to see sane old American

friends.
fit h every good wish,

Sincerely yours,

Thomas J. Felder, Esq.,
114, Faubourg St. Honore,
Paris.

BS/V







1718 H Street, N. V.,
Waihineton, D. C.
November 2, 1925.

My dear Wills

This is a quite personal, unofficial and confidential reply to
your note of the 27th, because, in the absence of opportunity to talk the
matter over with you on account of my absence from New Torbt, I must write
you a very frank letter.

The questions raised by the reports which you have sent me, and
which I have read with great care, are partly questions of trade, competition,
and profit, bell they are also partly questions which are essentially economic,
and, in a sense, with the world in the condition which it now is, they ace
almost moral questions.
Disregarding for a moment the various arguments advanced in the
report to Dr. Toune as to the methods adopted by the Berman Government to
restrict the importatien of foreign films into Germany, the fundamental fact
is that the producers of films in the United States desire to increase the
sale of films in Germany because by doing so the profits of their business
are enlarged.
On the other hand, the effort of the German Government is
directed by an absolute embargo, or limitation upon ioortation, to restrict
the importation of films into Germany.
The essential fact to be considered is whether the effort to
restrict importation shall be effective or not, and whether the moral or
economic grounds for the restriction are eounde Whether that restriction
is imposed by absolute embargo, or whether it shall be made effective by
the imeosition of a tariff is altoeether a question of method. If a
tariff is imposed high enough to restrict importation, the result is the
same as is accomplished by an embargo.
To the extent that a tariff is
not effective in restricting importation, just to that extent American
producer;; 01 films are able to profit.

As I look at it, the only question raised by the report is
whether the importation of films into Germany Should be restricted or
prohibited, or whether it should not be restricted or prohibited.
The facts in the German economic situation today are briefly
as follows:
The German Government is obligated, under the provisions
of the Dawes Plan, which has been accepted by Germany's creditors, including the United States, to pay to her creditors a total of 4625,000,000 a
year, or so much of that amount as it is possible to pay without breaking
down the economic life of Germany.
After a rather exhaustive discussion of this matter with the
most responsible people in the German Government, and in the organization
which is charged with the execution of the Dawes Plan, this east summer,




2

Will Ne Hys, 2sq.

11.3,25.

I cane honmcconvinced that the German Government is intending, by every
No one knows as
means in its power, to live up to those oblieations.
It wisp ends upon
yet whether it will be possible for Germay to do so.
the extent, and the rapidity, of the economic recovery not only of
Germany, but of those nations where Germany must find a market for the
eoods Which she eroincee, and Which have themselves euffered as the result
of the war.
if the German trade, - by which I mean the eapaeity of
Germaey to sell goods in ferolge martete
Lncri see, the memeare of Gereeees
capacity to pay foreiee debts will, likewise, increase.
If OeMmanyle export
trede does not increase, the only possible method by Which. theme pa, mmts
can bo met will be by progressively and effectively inameasing the restrictions
upon im ports, so that eadh wort Wei, as Germany is able to develop will be

sufficient to cover the reparation mss, after paying for tbs.* sibeolute.
ly ooeontial imports of food stuffs art tan meterinle Which eerenn7 lost bar
itroad.

The problem, in a word, is either to increase COMM exeorts,
or to decrease Gernan ipparta, so that there mar be left abidance between
income and outee out of which these oblirntions may be met.
nor the Seportent thine for eermany, and for the rest of the
Germaoy should it the last dollar of these oblie
cations, and much =ore that the evidence of eeroanes sincerity Ln atteerting
to do so eLall be oonyinciee and conclusive to her crelitore.
world, is much lens la.

50 Seer as ny obaorvetion goes, there is only one way by which
this convincing evidence con be afforded* and that is by showing a willingness,
in the evel,t.thr_t exporte do not increase, to so restrict the expenditures of
the German people for luxuriee and extraveeenee, - in other words, so to
reduce the etenderd of lielaa in lererneethet there will be no Teention ehntneer as to the elncority of her puryllm.
ncpr,-.41.ae., the 771roblem to seely to all of 7earope, in fact to the

Whole world, ineteed of to Gormaey alone, it man n that the world today is
will the work of restoration- and recovery
faced with a very sieple choice:
be el.eeete,e towards increasing preeuction, increasine trade between the
nations, increasing consumption and theroby elevating stamdards of living; or
shall it bo dIrectie.tozsld7 thenlonment of n system of "hratal Ind cruel
international restriction upon consumption, - that is a ruthleas and heartless
eyetee of rcAraint upon expeadituzes peecticed between tAel neatens - or than
it be directed, as I say, tokrzle. the doimlopwent of trade and commerce.
Now it DJ Irrpene that at the moment, for monetary on l. other con -

siderations which seen to be centrelliee, the elliey of mney of Oermenels
neiehbers has been to impose various tariff and other restrictions upon imports
le ere not ouruelvie satirely fron from the pre eenre to impose
from :)erm,,-.uy.
Under these
restrictions upon imports to this country by increased tariffs.
circumetanoes, the tendency in Germany will he to impose reetrictions by
tariff or otherwise upon her own ieporte.
I do not think I would write yeti this letter were it nat for the
fear which I have of the effect of a notion -wide propeeauda through all of




1
410

Will U. Hays, Eaq.

3

11.3.25.

the theateee, or the meat bulk of them, which reach the peblic to an
enormous extent, and which might have the effect of building up a sentiment
of hoetility towards Geroany because of the effort of the German Government to
impose restrictions upon luxury expenditures by her citisens, principally for
the purpose of ueetime the absolutely just debt which she had obligated
heeeelf tu pay in order in part to repair the ceasequences of the war. iere
it a question of tooth bruehea, or apeles, or aaything of like character, I
think I would be inclined to keep ey own views to el/self and not write you
oat the thoaght trot it Le paseible to torn leoee upon millions
this letter.
of people in the United Etatee every day the enoreous infIeveace of the moving
picture film In e propagnada to attedk the policy of the Germea Joverameut
in its effort to meat its just obligations, gives me a feeling of despair.
So I ae writing you to beg that you bear in mind that the importee
effect,
tioe of articles of luxury into Germany from foreign couetries ie,
an impairment of Cleroanre capacity to pay her just debts to this country and
that 4he impaeirment of that aapacity, if it is due to
to other countries;
an unnecaasory importation of luxuries, may indeed be justly regarded by
Geranigia ceediters as a ca: sloes, Jr eoliberute, evaeloe of her obligations.
And I firmly believe that no greater service can be performed by the producres
of motion pictures than to auaounce to the weld that they are willia4y and
gladly foreeeing the eormee market In order to aid 3ermauy in a couscieatious
effort to pee, her creditoes.
!L

Of course I realize, as you do, that this argument can be carried
too far, and that its extreme ae.licatien would mean that the pajment of these
debts meat inevitably reduce a large pa-et of the world to a state of abject
The aeswer is that those people, and those oreekeizatioea who have
poverty.
inflezeco in the direction of freeiag coxnerce from the restraints, euah as
you feel apply to your trade with Germeey, abould direct it toverds combatting,
by every meaas in their power, any effort on the part of any nation to erect
barriers to trade such as I have described.
I have thought this over for some days before feeling willing to
If you have any doubt ac to the eouedness of my
write you this letter.
position, I wish that you would write me again.
And if you would like to telk it over eite Dr. 36104ht,, with
wilow I have discussed it, I will be very glad ieeeee to erreage a neotiag when
I return to Xew York next week.

AA any rate, please think it all over.
Sineerely /Tare,

Bill H. Hays, Esq.,
New York, W. Y.




MOTION PICTURE PRODUCERS & DISTRIBUTORS OF AMERICA, INC.
469 FIFTH AVENUE

NEW YORK CITY
WILL H. HAYS
PRESIDENT
1111ITI.A

ND SMITH

November 7, 1925.

SECRETARY

Mr. Benjamin F. Strong,
1718 H Street, N.W.,
Tashington, D.C.
My dear Ben:

OFFICE OF THE PRESIDENT

PERSONAL.

ACKNOWLEDGED
NOV 1 0 1925

13
I have your letter of the second and appreciate it.'

am in sy -athy
grasp o the
ole situa ion.

ny propaganda,
of that kind
taken the
people, with
our Chambers of
g yet.

iculties when
oduct against
or ours is, I
is on the
is hard on us
ecially when we
o this country.
lly that, because
industry asked
le in the
not entirely
r foreign
this means
get a Kontingent --

n of similar
ountries.
harnessed in
ent, is going
n. That is
ourse, but I
Ufa in an un.
with you about it

.

st wishes, I am




S;

WO/ lb 1925

p

RECEIVED

A.v!

30VERNOR'S OFFICE




Irk

November 10, 1926.

pERbowAL

My deer till:

Thank yoJ very much for your nice note of the seventh, Just
received on my return from Weehinton.
I can thoroughly underetend the difficulty sith which you and
your colleagues are confronted.
eometimee my reaction to verioue movee
now being made in Europe - etch country to protect ite on trade without
regard to reaction on other countries - is a rather aympbthetic coneideretion of tjee poeeibilities of lower tariffs end freer trade then just no
seem to be poseible.
The traditional attitude of thke country is such that I
imeoer.thility of tny move in te..t receion; eltho.5h 'uhe reel
teat is eau, day going to come in the contest between demand for debt
peymoet on the one hand, wed enuillinguees to receive goods oa the other.
But I do have b feeling
Just whet the outcome will be, no one can say.
of strong eympethy for tho,e countries which are entering into eoleme
obligation to make payments sno than on the one hand are faced with these
almost impenetreble harriers of tariffs eghinet their expolte, and on the
other hand, with tremendous political and economic prtseure from abroad
to prevent tnei erecting eimiler berries fleeinet their owe imeorts.
reeli7e

I supeose it its true enoeh to eay that every action of that
sort seems to be hostile to some ?articular interest, and that no nation
affecting trade reetreiete cell be aede perfectly Just end feir to all
But I wanted you to know that in * general end broad way, viewing
parties.
interested ir
the eronlee re a thole, rather than froi your etinei:oiet
motion pictures end films, I haven strong eympothy with the difficulties
of thoet netions, which include mere, on the Continent or Europe, who tre
making an earnest struggle to pay their debts and discharge their obligations or honor.

I knoe te't tr. Ech,;cht would be very glad to see you, but he
wilL only he here for e week longer. There eeeme little more that I con
do in the matter beyond &hut I h:ve, wed pooetbly I have teee too rrank in
expressing my feelings.
,e4ncerelv you r3,

Will H. :41S,
459 Firth Avenue,
Nem York City.
Bt.lk



MOTION PICTURE PRODUCERS & DISTriBUTORS OF AMERICA, INC.

469 Fivm AVENUE
NEW Yo Ai, CITY
WILL h. HAYS
PRESIDENT

CAllb E. MILLIKEN
OFFICE OF THE PRESIDENT

SECRETARY




January 3, 1928.

Hon. Benjamin Strong,
270 Park Avenue,
New York City.

PERSONAL.

Dear Ben:

Vincent Murphy is an applicant for the position
of Agent of the Federal Reserve Bank for the New York
I have had a good deal to do Aith him in
District.
the last few years and have found him an unusually
I know nothing about his peculiar fitness
able man.
for the particular job but no doubt he would be good.
I do take pleasure in expressing this appreciation of his integrity, industry, ability and judgment.
He is a good man.

With kindest personal regards, and best wishes
for a happy New Year, I am
Sincerely yours,

eed (
ie6feld




S

September lJ, 1916.

Dear Mr. Jones:

I am terribly sorry to have missed your call yesterday
and it reminds are of the fact that we both mis3ed a very enjoy-

able time at the mid-summer High Jinks this year.
:ith kindest regards, believe me,
Cordially yours,

JesefEALAWMUMei
1=Factor, General Military Relief,
American Red Cross,
Washington, D. j.




B3/MSB

VG. 301


NATIONAL OFFICERS

WOODROW WILSON, PRESIDENT

rfAird
RED CROSS WAR COUNCIL
V APPOINTNENT r.

c FRC:10F., OF TOE UNITFO 37117F,

S

October

1J1a.

year _r. Jones;

It was very good of you to write me so cordially about
the meeting last 2riday.
pleased.

I sincerely hope that the President was

It was intended to be a serious meeting and it seemed

to me that anything that would tend to make it otherwise would have
been a great mistake.

I hone the President understood that the audience Which

he addressed was a very carefully selected one, made up of the leading men and women of the city, who came there in the expectation of
hearing a message from him of momentous importance.

His reception

was most cordial, but I think the character of the meeting itself
exercised a restraintupon the enthusiasm which one meald ordinarily
expect at a conventional mass meeting.

The best tribute that I have

ever heard accorded any speaker was the impressive silence in which
the greater part of his address was received.

The comments on the

meeting, and particularly upon his address, have been universally
favorable.

I wish that he might hear them.
Cordially,

Jesse A, Jones, Esq.,
The American InEreless,
National Headquarters,
;ashington, D.

113 B




1.7)0144

O




October 11, 1318.

Lear

Jones:

It was very good of you to let me see 1r.

Tumulty's note of Dotober 8th, to you.

I am return-

ing it herewith for your filed.

I am gratified to learn that the President
felt pleased with that meeting; hero in rew York.
Cordially,

Jesse r. Jones, Esq.,

American Red151Pmerwm,
Wadhington, D. G.

Enc.




ot, THE JOHN PRICE JONES CORPORATION
Organization and Publicity Counsel
150 NASSAU STREET, NEW YORK
OFFICERS

TELEPHONE, BEEKMAN 1981

JOHN PRICE JONES,

President awl rfrIMIZI1,
GEORGE A.BRAKE LEY.
PIV.V IfitIO I nod General Manager

PARKE F. HANLEY, l'irePresnlont
H.W. TH1 RLK ELD, l'ieePrrsidrn/
ROBERT F DUNCAN.

July 29, 1921

ii.rePre.striovei

Dear Governor L)trong:

I should like very much to have you, as a member of
the National oudget Committee, understand the financial
situation of the committee and I take the liberty of writing
to you because Mr. Pratt is away and you are the only person
on the committee whom I know.
For about two years now I
The situation is this:
At first I
have been paying the bills of the committee.
was Treasurer, then the treasurership lapsed for some reason
or other and our corporation has been paying all the bills
as they were approved by wr. nowe, Lirector of the organization.
Outside of that we have done very little, as Mr. Howe has been
handling the whole matter.
Last spring 1 had a talk with iir. Pratt and at that
He told me then
time the deficit amounted t1; around $3,000.
that he was going to have steps taken to raise more money in
Now he has gone away without
order to cut don the deficit.
Since
giving me any instructions as to the limit of expenses.
then the deficit has risen to about $7,500. and expenses are
going on at the rate of almost $1,000. a week.
Frankly, I don't know what i r. Pratt's attitude on this
I don't know whether the directors themselves
situation is.
As a matter of fact, in the absence
know what the deficit is.
of Aar. Pratt, I have no direct connection with the committee
We are perfectly delighted to be of service to the
itself.
committee if the 2ommittee desires it and if they understand
I am not personally concerned about a dvancing
the situation.
the money and although 1 have no direct connection with the
committee, I should judge that A- have some responsibility to
Mr. Pratt, because in the past he has always met the deficits.
It seems to me, however, that my position is a somewhat
nebulous one and in the words of the immortal Harriman "Where
do I stand?"

Mr. Howe tells me that he does not know what my arrangePratt are, which again adda to the complication.
ments with
I don't ask you to take any action or assume a ny responsibility
I should, however, like to have you know the situation.



ashington, D. C.,
July 30, 1921.
Dear Lr. Jones:

Your noto of July 29 is just received.
(I wish I could givo you some definite suggestion about the
expense account of the National Budget Committee.
Perhaps the best
thing will be to await my return to new York, and I will then call a
meeting of the Committee to discuss _aye and ELans.

Eby work at the Bank, since returning from abroad, has been
too engrossing to permit of my attending meotirrs of the :ammittoo, so
I am not fully informed of What reports Er. Pratt may have made to the
Committee on this subject.

I am sorry that the burdon has fallen so heavily upon you,
and will do my best to get it straightens.. out when I get back. to
New York.
Sincerely yours,

John 2rico Jones, Esq.,
The John
rice Jones Corporation,
150 Nassau Ctreet, New York City.

BS.LIJD










August 19, 1921.

Debx kr. Jones:

Mr. Pratt ia sailing for home

the Steamship

George Washington to-day, and should be here on September
third.

Yours very

John Price Jones, EaQ.,
c/o The John Price Jones Corp.,
150 111106ftll St.,

New York, N.
DS: *1

Y.




0
December 18, 1922.

My dear Mr. King:

I enjoyed my visit in Chicago with you

very much indeed

benefited

by the frank talk we had.

it is difficult to get any publication which exactly

Jf course,

the questions that were in your mind;

answers

but I have endeavored to do so in what

I am now sending you.
Please do

not be ap::alled

at the sire of the

bundle when it arrives,

for

it will contain:

(1) The Annual report of this dank.

(2) The Annual

Report of the Federal Reserve Board.

little book published bi Professor 6.

(3)

R. Lerverer, of Princeton

University, called the "A 3 C of the Federal Reserve System", which will give you
some idea of its theory and of

its

oDerations.

(4) A copy of Part 13 of the

Hearings of the Joint Commission of

Agricultural Inquiry,where certain passages rave

been marked

relate to the extension of credit to agriculture.

that particularly

I ar sending you this volume

especially because it contains not only the statement which Governor Harding made
and which I made before the Commission, but also a

Skelton WilliaTrs, who has been

statement

made by

John

one of the principal critics of the policy of the

Federal Reserve System.
(5)

in

A

copy of the report of the

which you will find the various

to agricultural credit.




Joint

Commission of Agricultural

conclusions which

it has arrived at

in

Inquiry,
regard

0
December 18, 3922.

My dear Mr. King:

I enjoyed my visit in Chicago with you very much indeed end benefited
by the frank talk we had.

Of course, it is difficult to get any publication which exactly answers
the questions that were in your mind;

but I have endeavored to do so in what

I am not sending you.

Please do not be appalled at the size of the bundle when it

arrives,

for

it will contain:

Annual

(1) The

1-ieport of this oank.

(2) The Annual Report of the Federal Reserve Board.
(3) H little book published by Professor

N. liemmerer,

or

Princeton

University, called the "A 3 C of the Federal Reserve System", which will dive you
some idea of its theory and of its operations.
(4) A copy of Part 13 of the Hearings of the Joint Commission of
Agricultural Inguiry,where certain

passages have been marked that particularly

relate to the extension of credit to agriculture.
especially because it contains

not

I am sending you this volume

only the statement which Governor Harding made

and which I made before the Commission, but also a statement made by

Skelton Williams,
Federal

Reserve
(5) A

who has begin one of the princigal critics of

the

John

policy of the

System.

copy of the report of the Joint Commission of Agricultural Inquiry,

in which you will rind the various conclusions which it has arrived at in regard

to aricultural credit.




e

Atf<
JAN

LEDGE
-

7994

Guthrie Center Iowa

Dec 29 1923
Governer S4..aaj
You probably haVe forgotten me.
If ypu will remember,we met at theNational Convention of
the Ameeican Farm Bureau Federation.Yoe was kind eno,.711 to send
me some liteiature on the la-9 governing and the fundrioriof the
Federal Reserve Systee- I sure got a greatdeal of good froie study
of them.In my work in the Farm Bureau.Ibelieve Iwas able to counter
act a great deal of prejudice againseVeceDal Reseeve System.
We are studying the system of taxation in its present worke
ing form and several proposes new plans. At 3ur community meetings
and at our Chamber ofCommece meetings we: are having discueions and
round table talks on the subject.
TThere is a great deal of prejudice against the issuance of
tax free bonds of any description.
,160494n the evening of Jan.8 T9'ee4 we have a county meting and
I am elsted for a talk on the side of issueing tax free bonds to a
limited amount. I thought you might be able to send me some literature
on the subject in favoretax free bones and give me the vi .w of the
tae tern
frori a financiees view point.
I belieye the east axle the west and the farme and the cast
ern manuferer andt the great class of moneyee sun will get along bet
to
and all get back to a sound basis quicker if we got together oft
end
and on nietral giound to disAcuee,our mutual problems.
I believe the Federal Reseaeve,the .farmer of the middle.
iest have both p*rof ited by mutual contact a nc gaining the viepoint
of each other.
.

Ta.::es are like castol oil they both leave. a bad taste in the m.eeet

meeAe,but they are necessary to get results.They are both efficacious.
The big problem ie to aeministee them with the ieaet objectipn
fro:- the patient.
The question is whetbee it can be done throLegh indirect tax(..,
by a s-Laight sales .tax,or some less objectional way!
I will be glad, to give you any information on any topics I can
at and time and hoping I am not asking an undue faver
I remain as eve:
.

John W.King
Guthrie Center
R 5.
Guthrie County
Iowa

Iowa,the state that has every class of clircate and every element
of the soil,feom which she can gow any hind of produce or man.
We geow elany men of wisdom as well as the other extreme.
We have been glowing many of the othe- kind lately.







("Tv/'-'

Junury 7, 10'i-4.

fly dear Mr. King:

You Ere very much mistaken in essuming that I had forgotten you.
remember our meeting very well and have often :iondered whether you had the courege to
wade through the mass of literature that I sent you after our visit in Chicago.

-ince

the meeting, I have hed a rather long illness, but now and then see some of your
friends and especially

Cunningham, who is now a member of the Federal heserve Board.

As your letter only reaches me this morning and the meeting which you refer
to is tomorrow night, I am afraid what I send you till be too late to be of any service.

There is so much to be said on the subject of taxation, end there le so much

of a background of dissatisfaction itreat paying taxes, which comes down from the

feudal days T:hen no private property was sacred avinst coafiection by the King, that
one must realize thet the whole problem of taxation is not only a financial one but
it is likewise a social one.

There is no use in attempting to im?oss texes which by

reason of prejudice or any other reason cannot be collected.

find the

People

means to escape them; or if they become too burdensome and oppressive and too direct,
they will simply change them, because c,..fter all the vote of the people is capable of

accomplishing < rlything in change oflaw if enough of them vote that way.

It has always seemed to me, however, that there %re eme very simple facts
about taxation which we can always bear in mind with profit, and while they may be
a bit idealistic and not capable of realization, we can
get as near the ideal as possible.




t least make an effort to

For examlle, no governmen

Mr. John W. King

2

Janu:ry 7, 1923.

up debts with when to pa.ite running expenses; and

smoothly if it keeps pilin

a government - like an individual - must spend less than its income, or in the case

of the government, must collect more taxes than it spends if it wants to remain
solvent and to escape the penalties of inflation and an unwieldgy government debt.
Now as to the form in which taxation shall be applied.

There are all sorts of

theories on this subject, but it seems to me that the test is the fundamental one
that any system of taxation in order to be just must distribute the burden of taxation over all the people of the country in reasonable proportion to their ability to
pay.

Henry George

the single taxers alway

accomplished by having but one tax, and that applying to real estate inasmuch as
real estate was the fundamental property, the ownership of which was so widespread
and the use of which and the fruits of which were so universally distributed that the
taxation of real estate would be more equitable and result in an evener distribution
of the burden over the people than any other system.

The single tax movement has

almost disappeared and for your purpofe need not be diecuesed.

The next important principle to decide is whether taxation shall be direct
or indirect.

The most highly scientific direct tax which has yet been devised is

the graduated income tax.

Probably the most scientific forms of indirect taxation

are customs or import duties, and sales taxes.
serve your purpose.

The

Discuzsion of the latter would not

. however, is directly to the point.

It mutt be borne

in mind that every tax of every form is ultimately borne by the ultimate consumer
in the increased oost of the articles that he buys and uses and of the services of
individuals whom he employe.

Theoretically, again, if every citizen of the country

could be taxed exactly in proportion to his capacity to pay taxes, and if such taxes
could be completely and scientifically collected, the burden of taxation could be
distributed entirely through a direct tax on all the people, and the aurden adjusted
according to the means of she tax-payer.

This is a very difficult law to administer

and a rather expensive one, but is probably the most just form of taxation that has
yet been devised.



A gale

tax, on the other head, while po sassing many attractive

(4,

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Mr. John

3

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elements, especially those of administration, nevertheless,

Jenuery 7, 1.9f4.

oording to my view,

contains many inherent and unescepable injuetices and any law establishing a sales
For ex-

ax is exceedingly difficult to draw so as to minimize these injueticao.

amiAcp suppose we hed e universal sales tax which applied to every single thing
that people bought.

The injustice of each e tax becomes apparent ehen applied to

en article of universal consumption - like bread.

Contrast the effect of a saes

tax upon the bread consumed by a poor man end that consumed by a rich man.

Say

that the poor men has an income of ;t100C a year end hie family conrists of five
persons;

gin:

the rich men bee en income of $50,000 a. year end a family of five persons.

femiliee consume equal

mounts of bread.

Let us assume that the cost ie .1'100 a

year, end that the tax, for the purpose of illustretion, .mounts to $10.00.
man is paying s tsx of 1

The poor

per cent. of his entire income, and the rich man is ptying e

tax of 1/50th of 1 per cent. of h'e entire income, upon a necessity of live.

is the trouble with

Thet

sales tax, ..ead it is difficult to devise a sales tax which will

produce an adecuate income without applying it to necessities of life v.hich are consumed in

bout like (uenOties by both rich and poor and which, therefore, ;lute too

much of the burden on the poor.
So it is elm) in this m-tier of tax exempt bonds.

It creates t large

class of citizens who cre en jcying incomes from investments, in other words, incomes
which

re not earned by their labor, upon which they pay no tax whatever;

eherear the

men !ho earns his income by the work of his brain, by organizing great buoinfeees and
developing the country's reseurees, if he is successful)
tax indeed.

is payinp

very large

The argument about tax exmlp+ securities, like St ate and municipal bonds,

has always been that the rate of return is so much lees than upon other hen s -f
equall goodness

that the State is able to borrow :.c much cheaper, and the effect is

just t.e sane, as 4 tax collection.
the . argument is incomplete.

income of

1 million a year




There is, of course, something in that, but

For example, upoe a graduated income tax a man with an
might theoretics11w66liged to pay te.xes of $400,000 on

Mr. John W. King

Janus ry 7, 1914.

taxable securities, producing a 6 per cent. return on, say $17 millions.
income would be $600,000 a year, or not much more than 5-1/2 per cent.

*tax exempt securities toeay of a high

His net

If he bought

he could realise an income of 730,000

or $740,000 a year, and possibly more, and in proportion would probably be paying
considerably less taxes than many people who pay taxes, u; on earned income e.

this is a. very difficult conclusion to establish by figures.

But

One of the greatest

objections to the tax exempt securities lies in the fact that it creates this class
of rich people whose tendency is constantly to withdraw from business enterprise and
from the employment of their money in productive inveetmulLe which would benefit the
country, in place of which they put their funds at the commend of the States and miniof the

oiphlitiee at low rates of interest, thus encouraging the political subdivisions
country to financial extravagances.

Of course, the principle of tax exemption has been applied to the securities
issued by the Farm Loan System.

I have alway- felt that that was a mistake, that

it was a species of class paternalism which was contrary to the spirit of American
democracy, and that in the long run the farmer would not benefit by that kind of
class legislation.

There is no doubt that the distribution of credit in the differ-

ent sections of the country follows the creation of weelth in the different sections.

Such accumulations of liquid capital stimulates thu creation of banks which grow up
from successful end profitable production and trade.

Our West is still too new, the

population too sparse and greatly scattered, the country is too singly devoted to
agriculture as distinguished from industry to yet be able to accumulate its own sur-

plus of liquid funds for lomine4 DD that the other sections of the coun ry must he
drawn upon and the creation of thee loaning institutions with the power to issue
securities free of taxation undoubtedly does have the effect of inking it easier to
market their securities at good prices

and consequently easier to draw funds for

the farming industry into those eectione where investment and liquid funds have not
yet accumulated.

But if the principle of tax exemption is unsound, and if the

principle of preferring one cites of people in the coun ry over another by tax



I

k

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January 7, 1924.

5

exemption is unsound, why would not the farmers in the long run be better off by
accepting a financial system thich indeed might cost them 1 per cent. per ennum more

tor their mortgage lons, but, on the other hand, would put them on the same footing
as.r11 other classes of people in this democracy, and eliminate from public discussion
- matter which has many elements of controversy, dissatisfaction and complaint.

The farmers of the United States should not overlook the fact that the ease

with which StAes, counties and municipalities not borrow coney
ceuse of

t very low retee be-

tax exemption, is one of the C&BEt8 of constantly increasing taxation to

meet the interest end sinking fund on 1 rge debts encouraged by the extravagance of
State and municipal officials end legislators and that these very extravagances are
fostered by the

pplication of aux exemption to those securities.

I have written you very much as I would have discussed this retter with you
had we the pleasure of a visit together.

In addition I am going to try and look up

a little literature on this subject, having- the courage to do so after reading your

letter and gathering from it that you really found some interest in reading the books
thet I sent you before.

In the long run, it is my personal belief

that the people of this country

till be more contented, till be better citizens, and that its financi'l affairs will
be better bdministered if the principal revenues of the States

the Federal

government ere gathered through systeme cP direct tax, the mount of which is graduated
among the different classes of people according to their aibility to pay taxes, and
that the

uneeuel

burden of indirect taxes which

re added to the cost of living

without the means of apportionment as above mentioned torke more injustice upon the
poor than almost any other instrument of Government.
Yours very truly,

Mr. John 1. King,
R. 5
Guthrie Centre,
Guthrie County, Iowa.
BS.W'



John W.King
Guthrie Center
5

Iowa

Febrary 18 1924

AC

Wr.ED0ED

Benj man Strong.
I received your letter and was glad to note the caiekis1024
Ioften think of the meeting with you ane with other men fro other part
of our county that I enjoyed in Chicago in
as will as in I923.`
4,
I have seen all the states went of the g- eat lakes ane the Missouri
river.

To appreci34e the extent of our country and the vast diffirence in the
classes of ineestry there is in the U.S.,it is necessary to see some of it.
Then,to be a fair minded citizen it is necessary to put your self in
the other fellows position and see what you would want in his place.
It takes so much better eye sight to sec the other fellopws rights
than to see our own.
7e have so many men that have never been any where and do not read pi4e
much.Some do not t ke any papers whatever and great many take a daily from
tae nearest city anu never read a. magazine or any other literature whatever.
They have never trained their minds to think for themselves and the
conseouences is ,they are fertile ground for any propagancia that their specie
paper puts out. And we are gettind a new special brand handed out about every
day.Some of it is almost as deadly as the moonshine that is made in the littlt
valleys along our Raccoon river.The Blue Ridge mountains of Tenn. has nothing
on our hills here in Iowa when it comes to production along that line.
We have our Brookhart.Some of us compare him to the measles.WE have lov
been sick for a Oyi time and about the time for a change we broke out in a
rash.With measles there world have been a bad swell and we would have got weli
With Brookhart,we haee the stench but have had no relief.
We are now having a wave ofKu Klux Klan.It is sweeping over the counIO.per.
try and taking in the discontented and ieresposible element at
On acce -nt of my activities in community affairs,I was asked to one
of their meetings and I went as I wanted to hear their plan of working.
It was about as I thought it would be.He was a good lecturer and he
of them knew
got away with his talk.He talked fast and gave statistics that
nothing about and he had them hipnotized.They would swallow anything he said.
When two of us refused to join and give over the $10,he se_id we would
be excused.I wanted to tell the crowd what my objection was, but he would not
let me.It seemed to me ,there was a thin veneer of charity anu goodfellowship
over the rankest of racial and religious hatree.He was rank anti-Catholic and
anti-Jew.

It is nothing to me what a mans race or creed is if he is a good
citizen.And any one that does any thing to stir either one up is not worthy o
of a home ender our flag. We are having enough trouble without stirring any
more.

Ther has been three bank failures in the county this last year.
There never was so many voluntary bankruptcy proceedings ana foreclos
ere sales by the sherrif in our county.Many of our farmers are hanging on in
hopes of a better future aheac of rs.If they go down in any quantity there
will be an unrest created that will be hard to handle
I have not enough brains to know what is the best way out for us.
On our credit side we have a magnificent balance of sound integrity
and respect for law and court proceedure ana an inexhaustable supply of energ
y and health.We have the greatest and richest corn land in the world,and
that means the greatest hog cattle and sheep and pc) ,lteycountry in the world.
Our resources are only tapped,ane we have the security for loans of
untold millions and the most important of all to us is that it is good enough
that it shoeld command the lowest of rtes.
W2 are hard up but the great majority is sound,but unless we get lowe
er rates we are doomed to a lower standard of living and that will mean a
more radical element will be sent to o r senate and legislature,and that will
mean a more unsettled state for indestry of all kinds.
By rates,Imean,inteeest rates .Lower railways rates would help but

not nearly so mach as many think.


2

lbWe need lov.er rail rates on our bulky no low value articles and
could stand higher rates on more val able goods.
For instance; a raise of I cent a pound on clover seep: te-t is
worth 30 cents a pond would not hurt the proerce: nor consumer vey
much while i of a cent per poune on clover hay that is worth i of a cent
poune would simply be prohibitive. You see the hay would have to rot
ane be a loss to the producer and the railroad would lose the freight that
it might ha- c. earnee ane the consumer would have to use some other sub stitute.There is many instances like this only not so extaeme,but in the
aggregate they amount to millions of dollars.
Our interest rates are higl.They run from 5% on gilt edge farm'
loans with i% commission to 8% on personal notes.Many unscrupulus bank ers charge an extra commision with the sky / for the limit.
Some men that were caught in X22 anti 23 and had to renew their
loans;were charged as high as 7% with an additional commission of 5%
for the accommadation.That is what has made so many of our people so
radical and ready to listen to the tirades against a Wall Street that
was mace to look like a devouring lioli.And many think that the Federal
reserve took advantage of the conditions. Now when the local banks are
getting what money they want from the Reserve at 4i-% they are charging
us 8% for it.This makesso much dissatisfaction that it may create a
spirit through the middle west that may do harm in the f ture.
The trouble with so many of the miewest farmers is that they do
not know who or what has hit them in the past ane will not admit any
blame them selves ano so as they begin to feel their power through their q4
organizations they are ready to hit any thing that comes in theia way.
Having to content. with the forces of natr:e in the shape of rain
anti erought am wind storms ant.: uncertain roar condition: ,naturally
make of us a conservative people and working alone in the field:, and
communing with ourselves so much make us set in our ways ane whtn we do
run amuck it is a good deal like the Arab of olc,we do not know when to
stop am, freuently friend an ioe look alike for awile.
We have been hurt so grievioufiXisin a financial wy by our own
lack of foresight and by the crookee/or many men ane institutions in
whom we hat., the utmost confidence that we as a class have come to a frame
of mind in which we will not trust any one.
That is the reason why so many of our fellows thnee crown the
wheat conference in Chicago and are afraid of any great cooperative
marketing plan that involves the necessity of signing up a binding
contract with a central marketing agency.I do not see any other way to
eo,because such a plan will need millions anu men of ability.Such men
will not come forward without something substantial to work on and good
security for their money.
With so many of o r farmers the name of Bernard Barech,Julies
red rag to a bull.The cueetiou in my
Barnes,or Eugene Myers is like
mind is how to eradicate this feeling anti to be sure of whom we may
thust.If confidence could be restored we could all start on the road to
the greatest prosperity that our country has ever known.It would go from o
ocean to ocean anu from Canada to thee Gulf,ane would lead to a way for
helping across the water.
I would rather have a hand in acclompliEhing such a movement than
to be a Jenny Lind,or a Hawthorne,or the greatest general in the worle.
There ,i:/ are thousands of community meetings being held all over
this country and most of t em are well atteneed.All the way from TOO to
500 hundred people at a meeting.These are being hele in little country
churches and Legion halls anti contry.club rooms.It is the greatest
place in the world to generate a program that will work out a salvation
for ourselves and our neighbors in other lines of work.
I only wish it were possible to have all our people to hear some of
the
 men talk that I have had the good fortune to hear.I believe it would


.

-

3

ave a tendency to correct some of their biased opinions..
In compariso to the East we are a scattered community,we will average
IIP
about four families; to a square mile and a town of about 700 to every 8
miles square anc a town of from2000 to 5000 to eve :'y 3 counties.
We are improving our roans every yer so that distance doe not count
I when I I have bothered you enough for this time and so I will
as it cid believe was a boy.
close hoping that your health has been improving steadily.
At present we are shut in with snow and rain and slush,but the spring
time is.coming and we can feel good over thinking of the new crops that are
coming on anc. we will all be in a better frame of mind for the future.
From one who has faith in the future
John W. King
Guthrie Center
Iowa
R 5

P.S.

Coulc yo

give me the address of
Bernarc. Baruch and of Julius Barnes
so I coulc get by their secretaries,directly to them




J.W.K.

^

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claim

,Briculturat treat (C,

F. H. JENKINS. PRESIDENT
FRANK MONTGOMERY. VICE PRES.
NISSEN. SECT-TREAS.

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.,INS. PRESIDENT
MONTGOMERY. VICE PRES.
SSEN. SECT-TREAS.

-

W. J. ELLETT, COON RAPIDS. IOWA
F. H. JENKINS, BAGLEY, IOWA
FRANK MONTGOMERY. BAGLEY
E. C. NISSEN. MANNING. IOWA
C THOMPSON, PERRY, IOWA

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1-)

6
Palm Beach, Fla.,
February 9, 1925.
fly dear Friend

Zing:

Your very interesting letter of January 31 has been
forward,A7 to me, and, as is always the case with your letters,
I have read it with a great deal of mjoyment.
L'y interest in the beauties of this place has been
entirely confined to golf, but, if I tore you, I wouldWt be
so sure in asserting that some of the beauties down here are
'iunkissed" -- I believe there is evidence to the contraryl

Some time I am going to make a trip out to Iowa
and have a look at some of those farms, and talk with some of
the farmers.
Of course they have had hard times, but things
are looking up and this is no ti e for discouragement.
Rumors of the banking troubles to rhich you refer
have reachel us from time to time, and I suppose it is a fact
Many of the banks are loaded up
that they are not over yet.
rith loans which sere made for the purchase of farms at
inflated prices, and, of course, it will take years to work
But I don't ree why the Iowa Farmer
out of the jAfficulty.
should be particularly blamed for being carried away by a
speculative fever which absorbed the entire country. Certainly
we say the same thing going on in 17ew York in almost every kind
of commodity that is dealt with and speculated in, and the
losses here were in proportion, I suppose, just as great as
those that occurred in Iowa.
I am especially interested in what you write about
It is a very difthe rates that the farmers pay for money.
ficult problem which I had hoped would have been rartly solved
by the operations of the Intermediate Creit Banks. They have
helped somewhat;
but undoubtedly not enough.
ifficulty lies in the fact that the surplus
The
funds in the money centers are not directly available to the
borrorers in those sections where there is a shortage of bankMany proposals have been made for remedying
ing capital.
this difficulty.
One is that we should develop a system of state-wide
The argument in favor of it is urldoubtedly
branch banking.
that it would in course of ti e effect some reduction in
On the other hand
interest rates to the small local borrower.

11r. King

-2-

2.9.25.

there are strong arguments against it. And one is that local
banking autonomy would gradually disappear. The management of
small banking offices in small communities would be in the hands
o
managers who had no local res7onsibility, and little freedom
Our system of independent
in dealing with local situations.
banks would gradually disappear. It would tend to create a
system of huge banks controlled from the money centers. And I
rather doubt the desirability of any such development in this
country. 7e are too inclined to compare branch banking possibiliVes in this country with what has hap:ened in 2urone in
countries of very small area, uniform population, and short
If re are to have
distances for comunication and managem-nt.
any system of branch banking, it should be by gradual growth
and volition, and not as the result of a mad scramble by big
banks to buy little banks all over the country.
.:mother proposal has been to have the Federal Reserve Banks make (Arect loans to private borrowers and do business with private customers. And one of the principal reasons
advocated for their dealing direct with the public has been
that it effects some restraint upon the rapacity of the commercial banks. But again I doubt the wisdom of any such developIt would antagonize banking institutions
ment in this country.
generally against the Federal eserve System, and might, in the
The conditions which now exist in banking
end, break down.
in this country are similar to those which have always arisen
in new countries, and only the growth of the population and
In
wealth of t7:le country will in the long run overcome it.
t7-e meantime, good old fashioned economy is the thing that is
needed.
e have A.iminated a large part of the country's
liquor bill, but in its place we have the automobile. And when
one considers that this year it is estiated that there are
17,000,000 motor vehicles in operation in the United States,
many of them causing a real economic waste, it is not hard to
understand that lack of saving may have something to do with
these difficulties.

But one thing I have difficulty in understanding is
the urgency with which the question of the rate of interest on
borrowings is advanced by the farmers as though some i nroveFor e:.:ample:
If
ment in that matter would cure their ills.
a wheat farmer with a quarter section of land raises 2500 bushels
of wheat this year, he may realize, say, \4,000 gross for his
crop, whereas last year he may only have realized .,2,000 gross
If he
and have been unable to sur7ort his family in comfort.
is borrowing 3.,r5, 000 on his farm, the (7ifference betreen 6% and8on the money is only ,0300 a year, as against a possible fluctua2,000 a year. lay
tion in the return from his crop of, say,

o
Lake George, 1%.
''arch 1, 1919.

'f.,

Deer 7'r. Paine:

acouaintence "-ith
became connected

Beker commenced fiftem yeers ego, when

But it rtr not until

with the 7enkers cruet Company in 19'3.

nctobor, 1.907, 'hen the manic burnt unon us in "all Street, that Thad the
privilege of a more intimete reletionship.

I well recall the dray when, after

a very hrcty end incemplete neerninttion of the Trust Company of America, I rus

called to J. P. "organ
ono of

i;emneny's office to make a report.

Men I vent in,

llorgeni s nertnera eaked me to sten into a rear room and to elloe

7'r. ""illerd 9. King, then vice president of the New York Trust Company, vho
t8

a member of the examining

committee with me, to report to a meeting of trunt

comneny nreeidente that ten being held in another office, ee "r. "organ wished

to have e telk with me privately about "het I had learned of the company's

affairs.

Yr. ',`organ came in 'ith

Baker end "r. JE83313

und stated

in a rather etrohetic reenner thet nothing could he accomplish el at the meeting
of trust conineny men in

the next room;

bourn -ithout rerult; and it

that they had b

was hopeless to expect

en talking for some

results from a group of

men "*he e-ere so little aceutirted that they had to be intreouc d to etch other
I spent porsibly an hour, stating my impression'. of the Trust
when th eY came in.
Company of hcorica to t-'r. Vorrs,n,

"r. r'elker end 'Pr. Ftillretn.

1 recall

that there wta no hesitation in their agreing that advances must be made at once
to the Trust Company of emerice, even at the considerable risk involved because

of the little then known of its condition, as my report coele give but slight
end fragmentary information after the hasty exaninatim that had b-,en made.

_h set Ne. 2

Yr. Peine

3.1.15.

Sheet ro. 3

Mr. r bine

3.1.19.

Ileet No. 4
of courage.

Ur. ?eine

will

It

doubtlesc

sheer° of every corneitment

shoen that the Firet National !3nnk took a large

for the general good that was made, and I have na doubt

reknit that he had no expectution of incurring any

thet ?'r. Banker would to-dry

serious loss in connection

3.1.19

Kith

any one of them.

14a hed faith:

`!y confect with him in subseeuent years, until April of 1917, had to
do orincinnllv

with

the

routine of the businees teci development 04" the Flenkers

Trust Genet:my.

.As soon es !7ecretery rc;,doo decided to employ the Reserve Banks to

out his nrogrem of war finance,

of benkers to runervise

es en edjunct of

the

it

ca:ry

beceme necessary for us to organize e. committee

these oneretion in behalf of the Treesury Department, end

etff of the Federal Reserve Bank.

Mr.

Baker I:octane a 33 ek7,

her of that committee, vnd I think no relationship which I have eve .r hed eith him
has brought out so clearly his, courage, snd, st tht same time, hic m'>dosty.
Weer men of hie

flee

end lonr exo-u'ience in Nem York might hevn hesitated to ac-

cent membered?) on v. committee of flint kind, and

felt that it

snoreprivte for on > of hip ctFff to servo in hie piece.
70eeri

r ides from

the start.

Ha not only became

one of its mart regular and feit;:ful

But

enulci have been more

thet wee

never "r.

manber of the conecittee, but

attendants.

It soon develon3d that the committee, in Fddition to sseumini: responsibility for raising funds for the Government, had become, in

for the ehole money situation in the

city of Now York.

inge from the bunks incrersed, there wss e
their loene mode to members of the

a met:aura, reuponeible

As the Gov3rnment'e borrow..

strong tendency for them to withdrsv

t--ck :3xchunge, and repeatedly, it meetings of

the committee, it mzs necessary to raise lsrge sums to ha loaned on the Str:at (sit
well es ltrge amounts to be loaned

to

the Government on

certificetee of indebted-

Sheet No. 5

Vr. Paine

were) from the institutions represented on the Committee.

3.1.19.

rr. Baker sae almost

inveriebly first in making large pledges of this charrcter, end it bectele

n

v,rtion in the meetings, -hen these discuesions took piece, for the recretrry to
heed him 5 pad and pencil in order thut he might ?sake apeortionments around the

table, which semetimee 'were for mounts aggregating t50,000,000 or itsool0000.
The mereb,rs of the Committee accented generously end rillingly a certain leader-

rhip by !!r. Raker, in thin IV tter, sn:t showed great deference to hie vises.
M.

rtme ..es true in nh,cing the Liberty Loans. in the first loan a sub-

committee rrs appointed to eolicit le.rge subscriptions from individuals

E., nd corpora-

tions!, yr. Lamont, of J. P. Morgan & Comeeny, being chairman of that committee, and

"r. Lamont eubsequently told me that *bon the lint ran mt.de

Mr. Raker e member.

uwi, ?fr. ns-ker coereeristed by ft,r th largest number of nemee on till lift anj, mede

it his nerrensl business -- I mit:ht any hie sole businets for c time -- to get sub rcrintions from all of them, and writs , clam: t uniform success. The result sae that

the 7irst Netienel tlenk turned in the largest subscription of any banking institu-

tion t n the first loan.
It -ran et this time that it become neceeetry to bred( do*n the prejudices
of

w work bankers ageinst borrowing money from the Reserve Rank.

riuker cams early to
Nations).

an

s

m eting end, drewin,; me one side, stated thrt the First

might went to borrow' '50,010,000 from us.

they could heve it.

One dry Mr.

I told him that of course

As I recr11, the securities cam over end the bank sac credited

with the 550,0r)e,r,I00 the si H dr-y.

I imagine it men the first time the riret National

Rink hnd ever borroved in its history, snd Yr. Raker rho probably ae much surerised
et Os, ease "-ith which the trans!' ction ram affected as other bankers were to see

the rtrtectent that the loan bed been made.

It rent a long way toward *bretking the

0

Sheet no. 6

'!r. Paine

3.1.19.

ice" heceuee the statement published by national b!elko at th

call of the Comptroller

shortly thereafter shored total borrowings by the rirst Rational Nink of

65,000,000.

(In this connection I believe it would be illuminuting if an account, in detail of
the trensectiens or the rirst Kational Bank with the Federal Rererve B144 could be
nubliehed -- It would oho- an estoniehing record or financial transactions, nrobably

unprecedented in the country, end certainly no in proportion to the site of the Bank.)
During all of th,

summer end fell of 1917, when new Problems had to be

faced, and upon s scale hitherto unknown, it 'eta necessary to htve frequent cern-

mitt-e meetings at the Bank and at very ehort notice.

I recall ,-ith some regrets

that one day a sub-committee of the Liberty Loan Committee ear baked on very short
notice to m-et at my office at 3:00 o'clock.

Shortly before th

m-atini:, a very

severe thunder storm broke ovr the city, and I had not the slightest expectation
thut the members of the committe:e epuld aosear.

)n the contrary, ho' ever,

Baker

come into my offide nremptly at 3:00 o'clock, drinning vet, and re7.dy, as always,
for Whatever nee- development rer in hand.

And the other momb,,re came also:

The situation rhich arose immediutely ufter our entrance into the ear,
contained so many noesibilities of differences of o,linion and nelicy, that b group
of independent, strong- minded, man, such LS constituted this committee, might
°Frill/ have found it difficult to function.

Such differences of opinion were in-

evitable, end did develer, but it is no exaggeration to say that there never eras
a tine when Yr. raker res not

to subordinate his views to those or o

majority, and principally these of younger men.

There was never a time ehen his

orn suggestions rare based upon other than the highest quality of patriotism and
unon his desire to resist the Government and his country in carrying out its war
progrem.

He has made trine

to 7ashineton for th,A purpose at the request of the

0 II
at

'7

.

3.1.19.

7_1r. Paine

treasury Deportment and the aesorve Bank, and ho hoe reputedly stated to me,
personelly, thet hie personnl services end the influence end fecilities of hia
bank, and everything at this command, were st our despoeel to help make this
Perk successful.

The first step towards ineugureting the first Liberty Loen in New
York was e luncheon given to fecretcry VeLdoo at the ilenkers Club.

Ucedoo eet et my right, and Yr. Baker next to him.

Secretary

They spent the entire

hour of the lencheon in disceesiee the Treveury Department's plena, trid i have

heard both from Vr. Baker end from Secretary WcAdoo since then that that meeting
laid the foundation for e mutuel confidenco which 1 believe has ateudily grown
stronger during the rp.ut year and ens -hull, end resulted in the Secretary enter-

taining a high regard for Yr. Bakerle views.

Frequently, in meetings ith the

i7ecretery, he has asked me to find out Whet "r. Raker thought about some matter
under discussion.

I sueeoce it is a fact that few men of his prominence and influence are
es little knovn, generally, throughout the country as Yr. raker is.
the exnlenetion lies in part in hie oen character.

Probably

This mor, vs I now feel, be

eummed Up in three outetending qualities nature' to the man -- one is his simplicity, another his, modesty, and the third hie courage.

I don't believe

Beker over solicited a naeenheer interview, end I feel very sure that he he
scrupulously avoided them ebenover possible.

i have never heard him make a

remnrk that could be considered boastful or egotistical, and, on the other hand,

it would be the universal statement of all of his friends who know him intimately
that few men in "all ::treet helve exhibited greeter courage in crises than he.

sheet No. 8

. Paine

?.1.19.

During all of these troublesome times, 1 have never reen him enter into o cot,-

tention or betray temper.
There mre few men in this country the uccumultte greet -wealth

wir,o do

The whole

not muccumb to the Americen enirit of displey in 807,3 form or anot%er.

record of /!r. 74ekar's life and of his ,dminietration of the First Nationel Bank

hes been one of avnidence of disnley, extravagance, rest° rend publicity.

with

it ell, we 'ho know him well, have seen the ovidencen many times of stroni; human

affection, Which would diEnrowe any thought that he belonged to that class of Fall
Street men Who are so frequently cherrcterized en "cold-blooded" and "herd-hearted."
Ho is en honest, modest, end simple man, whoee courage is founded on
faith in hir country, on the honesty of human beinFs, and on his own judgment.

of course you do not expect to incornorcte any Pert of the ebove in your
book es it is written.

Georre oen do thmt much better than I can.

I have simply

endeverod to write quite frrnlay of some few of my experiences with Mr. Baker,
rni seer+ of my on estimates of him, gathered from these experiences, Which might
be of wall() in trenering the story of a men's life, Which it certainly must be a

nleesure to ynu, rs it would he to rnyone, to be elleeed to nrenare.
Very truly yours,

Albert /I. Paine, ;:gas,

nrenxville, re York.

BS.MSB

A.B.P.- 2.

Phoenix, Arizona, April 6, 1920.

Mrs. John T. Pratt,
o/o Re ublioa National Committee,
19 W. 44th St. Now York City.
My (L:ar Ruth:

This is a reply to your latter from the office
juut received, as _I am working on somo mail.
I must take
opportunity to write you frankly with sore personal
comments on the questionnaire on banking and currency.
If
you think worth while, dhow this letter to Et. Hays, but
tell him that for obvious reaeone I would greatly prefer to
have you and him hold it in confidence. The mowers to
the questions whioh I oncloae explain themoelvea, but the
following general statement is needed in further explanation.
When the war started in 1914, all beilige ont nations
our markets came here to buy foodstuffs
and military supplies in unlimited quantities and be,land both
our capacity to produce and their capacity to pay by the
usual exchange of goods for goods and oervicoo forsorvioco.
Thi
resulted in various economic phenomina which may be
which had atlases to

ewrrized briefly as follows:
(a)
(b)

We planted more land and increased our
farm production.
We bred ore draft and food animals and
increased our iv:rds.

(c)

aterial required abroad for
litary uze.
um, oi money abroad.
hidh we owed abroad.
a billion dollars of gold,
bank reserve° by that

We enlarged our industrial plants, built
new ones and greatly inoreaaed our prolpitt.Oh

,

S
Yro. John T. Pratt

"2*

Now York City

which unaoubtedly, and in my opinion, unavo*dably was bound_
to advanoa under oondltiane -ableb no eyatem of banking or of
000nomio* which has yet boon devised could be made t control.
The above relates to the period between the oommenooment of the war in 1914 and our ontranoe into the war in 1517.
Shootly after we ontored the war, and our onormrus
finanoial operation@ commenced, a considerable number of the
lei c;a.ng economists of the oollcoo professor, doctrinaire type,
undertook to oriticiee the policy of the treasurg and of the
federal reserve oyotom.
One of the leaders in thle oritiosm
was Profesoor Hallo:rider, whose nano appears uron the papers
you sent me, and I suo.oeot that posoibly ho and game of the
othero whop° names I dotioe may now be undertaking to direct
thecae oiritioisme Evoaiont the present political party
adkiniotrotion in ot:ioe for political* purposes.

.

Please do not allow youroelf to be mialed and
possibly load into difficulties' by the oritioisms of theoriets
who have had .absolutely no expetienoe in practioal affairs
and who Ara, in fact, vary poorly informed of what actuo.11y
transpired, cad therefore, rater naturally judge by the moults which they see rnther than by their on knowledge of
all of the circumstances and difficulties which wore enoountered
in a000mpliehing an almost aupuhuman task.
Mr. Vondorlip and others hove cOorged that the
federsa reserve syctem was subject to politioal domilvtion, be7J come of them thought they
ocrc not
como ou7.
ghoul. be, and boarmse those rates were in a measure fixed to
facilitate the treaoultAllplappo. This is a wholly oliotakon
program is something as followo:
idea and a oorreot vi
Broadly speaking, there were three ways by which
inflotton might be kept under control and prices kept down.
(1)

General economy in the.conomtion of goods or all
kinds by all the people of the country, so that what
was required for vAaitary puippeepe mi:ht be available
out of
)
(and this includes labor and'transpo
what was saved by economy..
.

(2)

Curtnilment of borrowing; froh. banks in order to expand production by the imposition of hoavy raters
for loans and a consequent tax upon production based
upon bank oredit.

(3)

The payment of higher and more attractive rates by
the goverment for war loans so that a wider

q

Mts. John T. Pratt

ff3s

New York City

distribution to subocelbere would result without
need for bank borrevinge in order to carry bonds.
You certainly and I believe most of the people of
the country are aware of the efforts made to impreso upon the
American ,people the urgent needs of economy and the dioorganiting
conoeluanoes reeult2,ng from higher prices, if they did not heed
the warning.
It may be that more could hate been done in
this line, but the responsibility for thie
if'lt wac
a failure, rents neither with the federal reserve eyetem, nor
with the aJmiaistration, but rather with the peculiarities
of the American temperament and the habit° of a people who
were accustomed to enjoy ne luxuries and eetravagencee t2-434
are inevitable in a nee and rich country.
As to 2 and 3, you have frequentle: hoard me say
thet to fix the responsibility for the policy of the treasury
and the federal reserve system is like Ztxing the responsibility
for breakiw.r a string upanA0040 two people are pulling, one
at each end with all their might. Con2;roas was
with
the duty of authorizing war loans end delegated a most limited
authority to tile secretary of the treasury to fix rateo and
terms. The Congress simply heard his reoommendetions, which
were arrived at after oonsultinr the reserve banks and other
bankers.
Asuuming, however, that the ecorearty of the treasury
had aufficinet influence with Cengreso (which wee really not
the case) to be regarded as himself Oetorminine the rates to
, mere were then two bodies between whom this queetion
o
ret's lad to bo settled. On thojpne hand the treasury
jeeertment, ::red tch the °thee hand the federal reserve system.

The facts are that in every inetanoe they redo every effort
to have their minds meet and to agree upon the wisest couree.
In some instances I personally felt thet the rates were too
low, but in all of those oases there were others of my
associates and many other benkers outside of the reserve
system who felt that they were either too high or in some
oases were about right. As must always be true of such Letters,
those policies as to rates were the result of disousoion, inquiry and a composition ef oonflictine views at t7e: moon oint
at which it era.; believed that t7,e 4reetout possibilities of
success existed.

Looking -t the subject in eeneral terms, the rates
et which the United States government borrowed money hee to be
determined (upon the above assumption as to the secretry's
powers) either by tho seoretery of the treasury, or by the
federal reserve cystom.
The secretary of the treasury could
fix rates if Congress authorized him so much below our rates
that his loans would be hopeless failures, or on the other

ds beyond
t reeort to
der to pay
s, such as

omy upon
e value of
many
in hardships,
n those reof bank

e
d
ted

e
but
t

n
, in

dict.
ugust
at
had
s
had

s

lire. John T. Pratt

Ilea: York City

hand we could aavanoe our rates so much above those atavhioh
he felt that he could borrow money that we yould cause his
loans to fail.
Looking at the matter oeneibly and with due re*ard to contemporaneoue conditions, what could be done under the
circumstances that was not done?
These men who criticised
wht wan done have from time to time come forward with soae of
the moot unpraotical and ridiculmaapuggeotione that I have
ever heard. (heir great ory hao al& along been *higher intarget rates
and yet any sensible7Peroon runt know th,tt a
nation which -encounters a demand for goods beyond its capacity

Lire. John T. Pratt

115e

New York City

jutified, it in litle indeed t-7' uee for a political campaign,
when there in so muoh good miterial lying abut loose if pn#1,
4ante to take a °lam at the administration of the war.
Lest you thin-:. I mieunderet.7md the questionnaire,

I should cry tivt
leant I hope that it will be used when
comr,leatt, in,prep-rinr! a platform for the Republican party
r: ±-they
an in oonductilig a oampaign for the election of a
wish directly or
Republican preeid.ont.
Obviously, I do
indirectly to pl,:!Ce myself in a position of oritiAsing
my war associates or the pro3ram wbioh we together agreed upon
and orrried out, but az to the federal reverie sys,fwand the
cot unaer which it i created, there are many imfortcnt Constructive and boneficiai changes which orn be made by Congress
if taken up in the right spirit, wholly freed of partisan or
politioR1 objects. I wish you would think about this a little
bit, if you aro
all interested in thin brcnch of the pock,
and ask Er. Hays if I could not be given opportunity, 'either
6.urinL; my absence, or upon my return, to go into thin thoroughly
with him and his associates.

You must not think that egotism prompts me to write
that no one who was concerned in there matters during the
wp.r period hs.d nuoh an opportunity to see both _sides of the
picture as I did. My work was both in the tro2ury in the
Ref:larva bank an
in the war loan organizations, and I think
no one in the country had the opportunities which I had during
my tripe abroad in 1916 and 1919 to get an underetanding of the
So please
e:Lrerionoec, diffioultiss and views of our ailiew.
to 'vehemont,
regard this ouggemtion, which is possibly a little
that there is little to be gained by a orilpioism of the way in
financed and a very good chance that It will
which our wox
react won these who indulged in it.
Your letter makes me regret that I hrwe no ppportunity
and had I the opportunity, no right to take part in these
matters, but good lubh to you :-);nct your orzlmiltion and partioularly to you fvld Mr. Hays.

Rathfully yours,

Pheenix, Ariz na, April 6, 1920.

powers.
It is manifestly abiird to claim that governLent
borrowing and the rates of interest which the government
paid, and which the Reserve Banks cLarged was as great ar.
influence in advancing prices as was this wholly unrestricted
compeiation for goods at any price for inredi-te delivery
by both the governments and the private citizens of this
country and of Europe. It would be more accurate to say that
thc advance of prices caused by this c.lepatitive buying
neceesitated larger 'issues of currency and a greater volume
of bank credit.
(3)
I firmly believe that much lase expansiori of both
credit and currency w uld have occurred during the war if a
more vigor.* and arbitrary control of waste, extravagance
and oonsuniption of, geode and labor had been undertaken by all
of the belligerent governments. But here we encountered a
difficulty.
Had such stern measures been undertaken, the war
might have beoonie unepular, a moral reection hav,; occurred
and the war been lost because of the antagonism of the civil
population.
Honesty rely here require the ad lesion th:.t war
always naceealtates a Choice of evils, and It vay be that
expaneion viae the lesser evil.

Undoubtedly.
It met be borne in mind, however,
,ne owe coneideretiono -e'ich governed the fixing of
interest rates on goverment loans before the armistice,
.

continued to operate feE L1,..ny menthe after t: _e areistico wac

signed, and to some extaht after the fifth victory liOcrty
loan was floated. The moat difficult period of the whole
war in a finanoilik sense wc),a between November 1916 and July
1919.
Without desirrig to be dogmatic, my best judgment
at the time and wince was that the tone) of the fifth loan
were exactly right, but that the troasury-and reserve bank
rates should have adv, need more sharply ocreetime during the
sueL:er cf 1919.

_

5.
Probably to some extent.
The reb-und from war
control to complete freedom in financial enterprises W43 bound
to occur in this country to a greater extent even t.cal in
Europe where it was pron-unced. With this whole subject I
had a most intimate contact during the entire war period
through being chairmen of the co called Money CorLitteo. Hy
boat judgment now and then fevered somewhat higher reuervo
bank rates, but at no time did I believe that hiher rates
within the limits of prudence could have been F:cre than a
alight influence, u; on spoculatile and financial enterprise.
Very few people are aware of the arbitrary control ehiel was
exercised in this matter an the serious, pain? taking efforts
which. were taken to curb the developrent. The answer to 'the
question can be postively made that higher rates would have
helped but would not alone have been effective.

.3.

AP

This influence in turn will be felt by the
what they borrow.
bank customer who in consequence will be chorged a hirlier rate.
In the meantime, of course,-the treosury must .pay constantly
In exorcising this kind of
higher rates for whyt it borrows.
pressure, the grortest a.re must be used to avoid autricht
The best policy is.probbly a tLoz.aughlgietex4s
ponic and breakdown.
high rate level, but not so high as to create alarmlp....ined
with a thorough going education of our bankers. All of this
is being done in some sections bettor than others, but on the
whole with groat intelligence and vigor.
I believe that the amount saved by the government
94
beteen the rates which it l)aid for iaous anti any higher rate
which 440 government might have paid for its loans was more
than offset by advances in the prices of goods and services
which the government had to purchase during the war, but I
do not believe that the general rise in the price level can
fairly be attributed simply to the failure of the government
to pay higher rates and the reserve bent zs to charge higher
It is in fact hard for me to believe that any student
rates.
of this subject can honestly attribute the advance in prices
to the failure cif they overntLent to pay a quoxter of ono' per
cent or a half of ono -"per cent, or even two per cent 'more for
its loans than it did pay. Priests advanced rrinciphlly becase tlie demand for goods exceeded the production, and the
Any other
1,11dinl for goods could not be 'kept within control.
claim overlooks the fnots and is based uoon
asstrtion
text books.
theories
I am familar with Professor Fieherlo p416n, have road
10.
hI publications and talked and corresponded ,pit him on the
The ploz is too revolutionary t' be undertaken in
subject.

the preoent disorderd, econoric conditions throughoUt the
world and certainly to uncertain in Ito effect for us to be
justified in attempting the experiment alone In the face of
nay very well increase in ly other
the disorder
countries in financial and currency condit one.
11.

The advonceetn discou* rates has cueed some'do-

°Ana in government s

utitice ab was inetitable and antiotdpatcd, but I have little knowledge of what has happened to
irresponsible promotions nor do I believe that these were
greatly influenced in their success or failure one way or the
other by a differenoe of one per cent more or lose in the
They were brought
rates of discount of the reserve banks.
on more ac a con,;equonce of high prices.of commodities rather
Durihr; tae period of floatation
t:i;:x the low mice of credit.
o2 fosse securities, credit for ouch purposes cost more
to the borrower for a longer and more aontinuoue period than'
during any tine within the pact twenty $eara cr longer.
-

the n

own exrerience with the reserve system suggests
for various changes in thu act, but few of which are

g6.
6.

The great rargin of profit ulich still
exists in rany llnes of business and
will continue to do so r_s long ra extravacance continues.

The above is sent in confitienoe for the personal
use of Mro. Pratt and Mr. Mays.

43

6

PM

LEAVE

R.
FOURTEENTH THE ABOUT livIEST
ASKED

NOT

ADVISE

HOWEVER WELL.

STAYING OF INSTEAD

MISTAKE GREAT
YOU

BEFORE

A

S

I

.

GO

71)

AR

ECT. EXP WORTHLESG

GETTING ARE

UNCERTAINTIES ITS WITH
I

IT INK

TH

.

STILL

IRIS A QUESTIONN LIVING

INTERNATIONAL TO. ANSWER
z_

.PHOENIX

SEND

BANK

YOU

KNOW'

YOU

YOU

S I

FOR

',HERE

TRIP THIS. TAKE TO

WELL SO

I

OF COST1

COULD

FEEL

HIGH AND.
IF

FINE

BE

GLAD

YOU

RELATIONS
WOULD T

I

NATL IX PHOEN CARE.
G ON

I
NY

NEWYORK

Sn

IN

Aloi X

BEN

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NL

API 1920

65 A216S

ARIZONA PHOENIX, AVENUE. CENTRAL NORTH 20-22 AT RECEIVED
VICEPRESIDENT

check. the after appearing symbol
the by indicated is character its wise
Other- message. aday Is wordsithis
or number check the after appears
symba6 three Meat of none If
Letter Night
I. N
Message Night

Nita

ATKINS.

F

E

i.Ni.aic.a.rir CARLTON, NEWCOMB

W. GEORGE

check. the after appearing symbol
the by indicated is character its wise
Other- message. day a is vordsittus
at thurnbei check the after

TEL

I D.

N.

SERVICE OF CLASS

omboia three mirea Jr .6
.
Letter Night
I N

Massage Night

Nite

UNION WESTERN

Message Day

SYMBOL

Ittir

AM

Letter Day

Blue

Blue

h3
UNION 47s7NAESTE W

Letter Day
Message Day

SERVICE Of

SYMBOL

7S

ASS

i

-1r

WESTER; .

UNION
TEL .4 " AM

CLASS OF SERVICE SYMBOL
Day Message

Day Letter

Blue

Night Message

Nile

CLASS OF SERVICE SYMBOL
Day Message

Day Letter

s) thin Ise day message. OtherIts character Is Indicated by the

NEWCOMIS CARLTON. PRESIDENT

GEORGE W. E. ATKINS. FIRST VICE-PRESIDENT

Blue

Night Message

WESTERN UNION

NL
Night Letter
If none of these three symbols
ears after the check number of

I symbol appearing after the cheek.

.

Nita

NL
If none of those throe symbols
appears after the check number of
Night Letter

words) this Is aday message. Otherwise Its character is Indicated bythe

symbol appearing after the check.

RECEIVED AT PINE & MONTGOMERY STS., SAN FRANCISCO. ALWAYS OPEN.

B230NY 46
El

NEWYORi< NY 357P i4

BENJAMIN STRONG

796
CR FEDERAL RESERVE BANK SANFRANC I SCO CALIF

WI LL YOU LET ME SHOW TYPEWRITTEN LET-ER AND ANSWERS TO BANKING
AND CURRENCY OUEST I 3NAI RE TO OGDEN MILLS THE CHIEF 'THINKS

PT

VERY IMPORTANT T H I S

I S DONE AS HE FEELS YOUR POINT OF VIEW 'THE

MOST VALUABLE

SEE THAT YOU ARE PROTECTED

I

WILT

IN THE MATTER
RUTH.

LASS OF SERVICE DESIRED

WESTE02sINA UNION
TEL - AM
.N4

Fast Day IIflessago

Day Letter

WESTERNUNION

Night Message

11

Night Letter

Patrons shoula mark an X oppor
the class of service desired:
ERWISE THE TELEGRAM
WILL BE TRANSMITTED AS A
FAST DAY MESSAGE.
I

Receiver's No.

Check

Time Filed

GEORGE W. E. ATKINS, FIRST VICE -PRESIDENT

NEWCOMB CARLTON, PRESIDENT

Send the following telegram, subject to the terms
on hack hereof, which are hereby agreed to

an Francisco, California,
A7ri1 14, 1920

Mrs. Jno. T. Pratt,
c/o Republican National Committee,
19 West 44th Street,
Now York City

Telegram just received

It will be 911 right to show answers to

Ogden Mills in confir_!ence for his personal information if you think he
Tould regard my vievs of r:ny Irlue

stop

some criticiJm of ..,-reLury

Memorandum and letter contained

some members of your organi7ction

and I had only expected.lt to be used by yourlf" ?Iv:1 tJe c17isf privately

I shodL rely on your judgwent
aeneral Wood helpful

. nd hOr-03 ylu

Wiest regards

BEWAMIA STRONG

'irri this ;nd Letter to

stop

V
ALL TELEGRAMS TAKEN BY THiS COMPANY ARE SUBJECT TO THE FOLLOWING TERMS:
To guard against mistakes or delays, the sender of a telegram should order it REPEATED, that is, telegraphed back to the originating office for comparison. For this
one-half the unrepeated telegram rate is charged in addition. Urdebf otherwise indicated on its face, THIS IS AN UNREPEATED TELEGRAM AND PAID FOR AS SUCH,
in consideration whereof it is agreed between the sender of the telegram and this Company as follows:
1. The Company shall out be liable for mistakes or delays in the transmission or delivery, or for non-delivery, of any UNREPEATED telegram, beyond the amount
received for sending the same; nor for mistakes or delays in the transmission or aeuvec;:, or for non-delivery, of any REPEATED telegram, beyond fifty times the sum received
for sending the same, unless specially valued; nor in any case for delays arising .trom unit% oidable interruption in the working of its lines; nor for errors in cipher or obscure
telegrams.

2. In any event the Company shall not be liable for damages for any mistakes or delays it, the transmission or delivery, or for the non-delivery, of this telegram, vgarer
caused by the negligence of its servants or otherwise, beyond the sum of FIFTY DOLLARS, at WiliCil amount this telegram is hereby valued, unless a greater value is st ir! in
writing hereon at the time the telegram is offered to the Company for transmission, and an additionat sum paid or agreed to be paid based on such value equal to one -tenth of
one per cent. thereof.
3. The Company is hereby made the agent of the sender, without liability, to forward this telegram over the lines of any other Company when necessary to reach its
destination.
4. Telegrams will be delivered free within one-half mile of the Company's office in towns of 5,000 population or less, and within one mile of such office it_ other cities or
towns. Beyond these limits the Company does not undertake to make delivery, but wilt, without liability, at the sender's request, as his agent and at his expense, endeavor to
contract for him for such delivery at a reasonable price.
5. No responsibility attaches to this Company concerning telegrams until the same are accepted at one of its transmitting offices; and if a telegram is sent to such office
by one of the Company's mcssengers, he acts for that purpose as the agent of the sender.
6. The Company mil n0r 1,0 liable for larnages or statutory penalties in any case where the claim is not presented in writing within sixty days after the telegram is

filed with the Comna,r fr,r
7. Special It re., governing I.e transmissi

,tf me...vrger, under the classes of messages enumerated below shall apply to messages in each of such respective classes in addition to all

the foregoing
8. No employee of the Company is aulhorwed to easy the lorecannilt

THE WESTERN UNION TELEGRAPH COMPANY
INCORPORATED

NEWCOMB CARLTON, PRESIDENT

CLASSES CF SERVICE
FAST DAY MESSAGES
A full-rate expedited service.

LIGHT tviEssAcr:3
Accepted up to 2.CO A.M. at reduced rates to be sent during the night
rid delivered not earlier than the morning of the ensuing business day.
PAY LETTERS

A deferred day service at rates lower than the standard day mesvnge rates as follows: One and one-half times the standard Night
I.-tter rate for the transmission of 50 words or les^ and one-fifth of
the initial rate for each additional 10 words or less.

SPECIAL TERMS APPLYING TO DAY LETTERS:

In further consideration of the reduced rate for this special "Day
Letter" service, the following special terms in addition to those enu-

merated above are hereby agreed to:
A. Day Letters may be forwarded by the Telegraph Company as a
deferred service and the transmission and delivery of such Day Letters
is, in all respects, subordinate to the priority of transmission and
delivery of regular telegrams.
B. Day Letters shall be written in plain English.
Cone language
is not permissible.

c. This Day Letter may be delivered by the Telegraph Company
by telephoning the same to the addressee, and such delivery shall be a
complete discharge of the obligation of the Telegraph Company to

deliver.

This Day Letter is received subject to the express understanding and agreement that the Company does not undertake that a Day
D.

Letter shall he delivered on the day of its date absolutely and at all
events;; but Ihat the Compariy's obligation in this respect is subject
to the condition that there shall remain sufficient, time for the transmission and delivery of such Day Letter on the day of its date during
regular office hours, subject to the priority of the transmission of regular telegrams under the conditions named above.

No employee of the Company 1.3 authorized to vary the foregoing.

MIGHT LETTERS
Accepted up to 2.00 A.M. for delivery on the mcrning of the ensuing
business clay, at rates still lower than standard night message rates, as
follows: The standard day rate for 10 words shall be charged for the transmission of 50 words or less, and one-fifth of such standard day rate for 10
words shall be charged for each additional 10 words or less.
SPECIAL TERMS APPLYING TO NIGHT LETTERS:

In further consideration of the reduced rate for this special "Night
Letter" service, the following special terms in addition to those
enumerated above are hereby agreed to:

Night Letters may at the option of the Telegraph Company
A.
be mailed at destination to the addressees, and the Company shall
be deemed to have discharged its obligation in such cases with respect

to delivery by mailing such Night Letters at destination, postage
prepaid.

B. Night Letters shall be written in plain English. Code language
is not permissible.
No employee of the Company is authorized to vary the foregoing.

October 30, 1925

Deli- Mr. julliv,n:

he iLiabci you IL Lhe Annex., bat it
thoee elastic affair:, ahere no incorIvenience radultea

Lit Ldoouse of your not coming and not dendine) vorc.
I have h a 60.01C E,A;..uriCaCC pith folic of your

profebdion heretofore, ,L1,1 rm;o how uncei'toia they have

to

bd uL tildes about _d.5,muntd, and so no h,trm was

done.

I

only sorry you n1 1-oa

Imo meeting.
Sincerely yours;,

M.,.-Ac Sullivan, Esq.,

1701 H Street,
4itshin6Lon, D. C.

(Dictated, but signed for
Mr. Strong)

d very int-:reLt-


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102